EX-12 2 exhibit12.htm EX-12

|  |  |  |  |  |  |  |  | Exhibit 12
TELEPHONE AND DATA SYSTEMS, INC. RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED DIVIDENDS
|  |  |  |  | Three Months Ended
|  |  |  |  | March 31,
|  |  |  |  | 2014 |  | 2013
(Dollars in thousands) |  |  |  |  |
EARNINGS: |  |  |  |  |
| Income before income taxes (1) | $ | 31,951 |  | $ | 11,169
| Add (deduct): |  |  |  |  |
|  | Equity in earnings of unconsolidated entities |  | (37,327) |  |  | (27,089)
|  | Distributions from unconsolidated entities |  | 12,820 |  |  | 8,089
|  | Amortization of capitalized interest |  | 2,036 |  |  | 466
|  | Income attributable to noncontrolling interests in subsidiaries that do not have fixed charges |  | (243) |  |  | (5,441)
|  |  |  |  |  | 9,237 |  |  | (12,806)
| Add fixed charges: |  |  |  |  |
|  | Consolidated interest expense (2) |  | 28,707 |  |  | 24,498
|  | Interest portion (1/3) of consolidated rent expense |  | 11,596 |  |  | 14,529
|  |  |  |  | $ | 49,540 |  | $ | 26,221
FIXED CHARGES: |  |  |  |  |
|  | Consolidated interest expense (2) | $ | 28,707 |  | $ | 24,498
|  | Capitalized interest |  | 1,799 |  |  | 5,664
|  | Interest portion (1/3) of consolidated rent expense |  | 11,596 |  |  | 14,529
|  |  |  |  | $ | 42,102 |  | $ | 44,691
RATIO OF EARNINGS TO FIXED CHARGES |  | 1.18 |  |  | *
|  | Tax-effected preferred dividends | $ | 20 |  | $ | 20
|  | Fixed charges |  | 42,102 |  |  | 44,691
|  | Fixed charges and preferred dividends | $ | 42,122 |  | $ | 44,711
RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED DIVIDENDS |  | 1.18 |  |  | *
(1) | Includes Gain on license sales and exchanges of $91.4 million and Gain on sale of business and other exit costs, net of $6.9 million in 2014, and Loss on sale of business and other exit costs, net of $6.9 million in 2013.
(2) | Interest expense on income tax contingencies is not included in fixed charges.
* | Earnings for the three months ended March 31, 2013 were inadequate to cover Fixed charges and Fixed charges and preferred dividends by $18.5 million.